Clearance rates keep getting higher, but stock numbers are low
A combination of low volumes of available stock and an easing of finance constraints led to an 18-month high in Sydney auction clearances over the weekend. According to CoreLogic, the emerald city's preliminary clearance rate hit 81.5 per cent out of a lower base of 303 homes under the hammer last week.
Nationally, the prelim figure hit 70.6 per cent, its highest since 2016. Melbourne was the country's largest auction market over the weekend, with a 70 per cent prelim clearance. Year-on-year volumes are down however; 901 homes went to auction this weekend, compared to 1,257 on the same weekend a year ago.
This trend of limited stock hitting the market is expected to continue into spring. Agents in Sydney and Melbourne are quoted today saying that vendors are likely to wait and see what the market does before listing their homes, with lower rates reducing pressure and providing more breathing space.
Last week the Reserve Bank went on-record to say it does not expect these lower rates to fuel a second debt bubble. Economists from UTS and Macquarie have expressed fears of the opposite today, following federal Housing Minister Michael Sukkar's comments last week that first home buyers should jump in with both feet to take advantage of current conditions.
One company hoping that more people take Mr Sukkar's advice is Electrolux, which has singled out poor trading conditions in Australia in its second quarter earnings update. It expects sales in Australia, covering both new-build homes and renovations, to take a while yet to recover.
For that to happen, people will need to start spending again. Ian Verrender lays out why he thinks Australians shouldn't be expecting wage increases any time soon on ABC News online today; instead, with Telstra laying off 10,000 and the banks laying off another 20,000, Mr Verrender suggests we're more likely to see further rate cuts.
This problem isn't going away any time soon.
The NSW government is dealing with the double whammy of building defects and combustible cladding issues, with today's media concentrating on 20-year-old decisions to privatise building industry compliance. That Carr government decision has come back to bite the Berejiklian crew, which is working to find a solution to deficiencies in building industry regulation in the state.
The letters page of today's SMH lays out the case for reform, peppered with some suggestions the government will find less than helpful. The biggest thorn in their side on this Monday 22 July however, will be lobby group, Strata Community Association.
SCA NSW president Chris Duggan is calling on the NSW government to adopt and fund a Victoria-style cladding rectification program, saying the problem is bigger and more widespread in NSW than it is in Victoria. Mr Duggan says he expects there to be around 2,000 buildings in NSW requiring replacement of cladding, compared to 869 reported in Victoria.